Evidence for a Power Theory of Personal Income Distribution

Evidence for a Power Theory of Personal Income Distribution
Fix, Blair. (2017). Working Papers on Capital as Power. No. 2017/03. July. pp. 1-125. (Article - Working Paper; English).

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http://www.capitalaspower.com/2017/07/no-201703-fix-evidence-for-a-power-theory-of-personal-income-distribution/, https://www.econstor.eu/handle/10419/162938

Abstract or Brief Description

This paper proposes a new ‘power theory’ of personal income distribution. Contrary to the standard assumption that income is proportional to productivity, I hypothesize that income is most strongly determined by social power, as indicated by one’s position within an institutional hierarchy. While many theorists have proposed a connection between personal income and power, this paper is the first to quantify this relation. I propose that power can be quantified in terms of the number of subordinates below one’s position in a hierarchy. Using this definition, I find that relative income within firms scales strongly with hierarchical power. I also find that hierarchical power has a stronger effect on income than any other factor for which data is available. I conclude that this is evidence for a power theory of personal income distribution.



Publication Type

Article - Working Paper


income distribution hierarchy power


BN Power
BN Business Enterprise
BN Distribution
BN Institutions

Depositing User

Jonathan Nitzan

Date Deposited

26 Jul 2017 12:06

Last Modified

26 Jul 2017 16:39



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